Russia Plans to Block Cryptocurrency Exchanges

The value of Bitcoin is skyrocketing against all odds, but the digital currency keeps running into serious regulatory hurdles erected by skeptical governments.

In September, cryptocurrency exchanges in China, where digital money is bought and sold for cash, stopped serving customers in the country to comply with government directives. Now, Russia is planning to follow suit and block cryptocurrency exchanges within its borders, CNBC and Russian outlet RBC report.

According to CNBC, first deputy director of Russia’s central bank Sergei Shvetsov said at a conference in Moscow on Tuesday morning that the government will block cryptocurrency exchanges. Russian news site RBC reports that the bank is currently working with the special prosecutor’s office to execute the block. Neither outlet reported a date for the implementation of the plan.

A “flash crash” that saw Bitcoin lose (and recover) $600 USD worth of its nearly $5,000 per coin value in mere minutes on Tuesday morning coincided with the news.

“We believe that for our citizens for business use of such cryptocurrency as objects for investment carries an unreasonably increased risk,” Shvetsov said, according to RBC (translation by Google). Russia’s central bank has a history of strongly criticizing cryptocurrencies and the risks they present to investors.

Russian news outlet TASS reported in September that the government was working on some new legislation to cover cryptocurrencies, which will be presented later in October. This raises the possibility that any future block will be temporary and exchanges will re-open to comply with the new regulations.

If Russia blocks cryptocurrency exchanges, it means that the digital currency will lose yet another market. At the very least, it might throw Burger King Russia’s Whoppercoin plans into disarray.